Detroit property owners can file tax appeals against the city during its bankruptcy, a federal judge ruled, while barring them from collecting refunds.

Michigan Property Tax Relief LLC this week asked the judge overseeing Detroit's $18 billion bankruptcy to let its clients pursue their claims. The company said they have been blocked by the Michigan Tax Tribunal from challenging tax bills because of the bankruptcy.

Lawsuits and other legal actions against Detroit were automatically halted when the city filed the biggest U.S. municipal bankruptcy on July 18. U.S. Bankruptcy Judge Steven Rhodes today permitted property owners to "take all steps necessary to file property tax appeals."

The company and its clients, however, "shall not take any action to prosecute the appeals or collect any refund of any pre-petition property tax overpayment absent further order of this court," Rhodes said in an order.